Terrible day for the markets though the first signs were there yesterday but today was the perfect follow-up to that huge sell off that we saw yesterday but nothing like today. There was a 700-points sell off nearly on the Sensex, which has dragged us back to 18,600 levels. The Nifty has collapsed more than 200-points and got us back to sub 5,600 levels- 5,560. There has been a big largecap sell off but even more savage and perhaps more importantly there has been a huge fall in midcap and smallcaps. That’s been the outperforming end of the market and that’s where the real money has been made and starting yesterday there has been a big pullback in midcaps.
Today the Midcap index was down 4.5%. The Nifty Junior fell 5% and many of the liquid names were down between 8% and 12% particularly the stock futures. Of course there are visible signs of not just unwinding in stock futures but heavy shorting in the Nifty futures again. Today the Nifty futures discount widened to 30-points and more than 50-lakh shares got added in OI, clear signs that there has been fresh shorting once again.
One look at the screen would convince you that there has been selling from FIIs once again today in both the cash and in the futures market. The global setup is not helping us. The Yen is gone to 109 to the dollar. There is consistent pressure in the Asian markets. The European markets also opened up weak while we were trading. So things are not looking good from a global perspective and that’s only adding pressure on the margin. India has been the biggest outperformer compared to other Asian markets and now as selling comes in this out performance is beginning to weigh on our backs as we correct and catch up with some of our peers.
So the picture has not looked very good today. Large caps across the board particularly hard hit were some of the power names across the board ABB, BHEL, Tata Power, Suzlon, Siemens and they all collapsed quite a bit. MTNL, VSNL got hit; ICICI Bank had a rough day. The entire metal space led by SAIL, Sterlite, Nalco were all down and down quite sharply.
Techs did not fall too much because they fell yesterday but otherwise they were not too many places to hide in today's fall. In the midcaps space, the carnage was even more severe. Popular stocks like IFCI, TTML, and RNRL got hammered 8-10% today. The entire fertiliser space has got butchered with Chambal and Nagarjuna leading the fall. Sugar has had a nasty fall again led by Balrampur Chini and Triveni, both those stocks were down quite a bit and many of the recent high flyers like your Hotel Leela, DCB, Bongaigaon have all come off.
Popular power stocks like Neyveli, PTC, NTPC have all corrected quite significantly. So big falls in many stocks today and the magnitude of the fall is 8-12%. From their recent highs, most of the popular midcaps have probably fallen anywhere between 10% to 20% so a meaningful erosion in value has happened already. Few like SRF, Jindal Stainless and Deccan Aviation did okay.
But the one stock, which deserves mention on the way up, is Religare. It debuted on a difficult day but finally passed the test with flying colours and ended the day around Rs 550 mark, which has to go down as a spectacular debut under the current market conditions from its issue price of Rs 185. So thumbs up for Religare but the rest of the market did quite bad, closed on a bad note and the mood cannot be good. So let us hope tomorrow there is some sign of stability because we are dangerously close to that earlier support level of 5,500 on the Nifty.
Source: Moneycontrol.com
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